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Lawmakers strike deal on state budget, but Rupp Arena out of luck

State Sen. Robert Stivers, R-Manchester

By John Cheves

FRANKFORT — Top Kentucky lawmakers emerged from a closed room about 5:30 a.m. Sunday to announce they had reached a deal on a $20.3 billion, two-year state budget that does not provide major money for a proposed renovation of Rupp Arena.

“I think it’s responsible. It makes a pretty significant and strong statement toward education,” Senate President Robert Stivers, R-Manchester, told reporters after the conclusion of an 18-hour negotiating session between House and Senate leaders.

One high-profile casualty was the $65 million in bonds Gov. Steve Beshear proposed in January for the renovation of Rupp Arena and the attached convention center in Lexington. Instead, the state budget will include “a small sum,” to be matched with local funds, so Lexington can move ahead with more planning, engineering and programming on the project, Stivers said.

If Lexington publicly produces a formal financing plan for the Rupp Arena renovation and a signed lease agreement with the University of Kentucky, which uses the venue for its men’s basketball games, then it can return for more money in the 2015 legislative session, Stivers said.

“There are mechanisms in place for it to go forward,” Stivers said.

greg-stumbo-3Some lawmakers on the budget conference committee said they were unimpressed by a personal appeal Lexington Mayor Jim Gray made for Rupp Arena funding on Saturday. Gray said UK has not yet signed a future lease deal for the arena, and he said he could not publicly disclose the proposed terms of UK’s next lease or his own plan to pay for the renovation project.

State Rep. Kelly Flood, D-Lexington, said she believes Gray did the best he could Saturday fielding queries from lawmakers.

“There are some very good questions about the plan that right now the mayor simply cannot answer,” Flood said Sunday afternoon. “I sense right now that the Senate really does want to keep the project moving forward, but they want more assurances about how the financing would work. If he (Gray) can come back, even in our next session (in 2015), having rolled out a formal financial plan, there could be some more help then. I don’t think it would have to wait until our next budget in 2016.”

Gray had not seen details of the budget agreement as of early Sunday afternoon, said spokeswoman Susan Straub.

“We need to see it and make sure we understand it before we comment on it,” Straub said.

Gray also has asked lawmakers to let Lexington raise its hotel and motel tax from 6 percent to 8.5 percent, which would yield about $3.5 million a year for the $328 million reinvention of Rupp. That proposal, which is not part of the state budget, appears to face an uphill battle in the Senate during the final days of this year’s legislative session.

House and Senate leaders, who spent the night cloistered in a committee room of the Capitol Annex, reached a consenusus on hundreds of differences in their proposed budgets. Most were relatively minor, but some involved huge sums of money or made significant changes to state policy, including:

Senate panel approves bill to stabilize Lexington police, fire pension system

State Rep. Ruth Ann Palumbo, D-Lexington

By Jack Brammer

FRANKFORT – A bill to stabilize Lexington’s police and fire pension system took another big step forward Wednesday in Kentucky’s General Assembly.

The Senate State and Local Government Committee approved House Bill 430 at the urging of Lexington Mayor Jim Gray.

Gray told the panel that the bill “will save” Lexington’s pension system for police and firefighters.

The measure, sponsored by Rep. Ruth Ann Palumbo, D-Lexington, would reduce the police and fire pension plan’s $296 million unfunded liability by almost half, to $160 million.

If the legislature approves the deal, the Lexington-Fayette Urban County Government would commit $20 million a year – up from the current $11 million – to more aggressively pay off the pensions’ unfunded liability over the next 30 years.

Overhaul of state pension plan in doubt; changes to Lexington plan still possible

By Beth Musgrave

FRANKFORT — An overhaul of Kentucky’s pension system will probably have to wait for a special legislative session, House Speaker Greg Stumbo said Tuesday. But there’s still hope lawmakers will quickly approve a separate plan to stabilize Lexington’s police and fire pension system.

State Rep. Ruth Ann Palumbo, D-Lexington, filed a bill Tuesday containing a compromise plan for the city’s pension system that was hatched last month by Mayor Jim Gray, police and fire unions and pension board members.

The plan was ratified in recent days by 76 percent of active and retired police officers and firefighters.

House Bill 430 would reduce the police and fire pension plan’s $296 million unfunded liability by almost half, to $160 million.

Local officials in metro areas call for public pension reform, local sales-tax option

By Jack Brammer

FRANKFORT — Lexington Mayor Jim Gray and Louisville Mayor Greg Fischer joined several other local government officials Tuesday to tout legislative approval of public pension reforms and a local-option sales tax.

In a news conference in the Capitol Rotunda, Gray said the financial problem with public employee pensions is the primary concern of a group called The Metropolitan Alliance for Growth. It is made up of mayors and county judges from the state’s largest metro areas who lobby the state legislature.

Lexington mayor says pension costs have ‘spiraled out of control’

By John Cheves —

FRANKFORT — For every $5 the city of Lexington spends, $1 goes to its public pension obligations, proof that “our pension costs have spiraled out of control,” Mayor Jim Gray said at a news conference Monday.

“For Lexington and Kentucky, if ever there was a ‘going out of business’ model, this is it,” Gray said. “Our pensions are unsustainable. There is no more kicking the can down the road.”

Gray, Louisville Mayor Greg Fischer and other local government leaders spoke to urge the 2013 General Assembly to pass pension reform, which could include a reduction in retirement benefits and a massive infusion of extra state cash into the Kentucky Retirement Systems. The various pension funds of KRS have a $13.8 billion unfunded liability.

The 30-workday legislative session begins Tuesday, but it’s unclear whether the legislature will seriously consider pension reform during this session, largely because nobody has identified where to get the several hundred million dollars a year needed to shore up the pension funds. An overhaul of state taxes proposed by a task force last year could raise some or all of the money, but the fate of tax reform also is uncertain in the 2013 session.

Beshear proposes $3.5 million in bonds for Lexington to begin Rupp project

By Jack Brammer and John Cheves –

FRANKFORT — Gov. Steve Beshear is recommending $3.5 million in state bonds to help Lexington plan and design a new 46-acre downtown arts and entertainment district, including a renovated Rupp Arena, which falls far short of the $20 million for which city leaders had hoped.

Beshear said the state money would be matched by $1.5 million from the Lexington-Fayette Urban County Government, for a total of $5 million.

“I know you all have seen some figures like $20 million being thrown around for this project’s planning and design,” Beshear told reporters Tuesday as he shared his two-year budget proposal. “Obviously, we didn’t have that kind of money. … This will at least let them begin.”

Beshear urges low-income Kentuckians to file for federal tax credit

Gov. Steve Beshear urged eligible Kentuckians Monday to apply when filing taxes for the Earned Income Tax Credit, a refundable tax credit for low- and middle-income working people.

“This tax credit is an extremely valuable resource for low-wage earning taxpayers struggling in this difficult economy, and I want to make certain that every Kentuckian eligible for this benefit receives it,” Beshear said at a news conference with U.S. Rep. Ben Chandler, D-Versailles, and Lexington Mayor Jim Gray at the United Way of the Bluegrass in Lexington.

Gray talks to lawmakers about future of Rupp Arena

By Jack Brammer

FRANKFORT –Lexington Mayor Jim Gray told state lawmakers Wednesday he is pleased that a new feasibility study about the future of Rupp Arena shows “it is still very possible to retain the extraordinary, awesome energy of Rupp Arena while actually getting far more for our city for less money than a new arena would cost us.”

But Gray, after telling a legislative committee the positives of renovating Rupp Arena, stopped short of saying whether he prefers a new or renovated arena for downtown Lexington that is home for the University of Kentucky men’s basketball team.

Gray said he wants “to listen” to the work of a special panel, the Arena, Arts & Entertainment Task Force, which is scheduled to complete its work Jan. 31 on the development of the 46-acre district that includes Rupp Arena.

“I’m willing to listen, I’m going to listen,” he said.

A feasibility study unveiled earlier this week says renovating Rupp Arena would cost between $110 million and $130 million, compared to $300 million to $325 million for a new arena.

It also said expanding the Lexington Center to add convention and exhibition space would cost $70 million, compared to $100 million to $130 million for a new convention center.

The study is to be discussed at a public forum at 6 p.m. Wednesday at Lexington Children’s Theatre at 418 West Short Street.

BEAM to have final report by October

By Beth Musgrave

FRANKFORT — A group of the state’s top business and education leaders hope to have an economic development plan that would improve advanced manufacturing and increase exports from Lexington and Louisville by next October.

The group, called the Bluegrass Economic Advancement Movement, or BEAM, is the brainchild of Louisville Mayor Greg Fischer and Lexington Mayor Jim Gray.

On Monday, the mayors announced that the group’s 21-member board includes the heads of some of the state’s largest employers, such as Lexmark International, Toyota Motor Manufacturing Kentucky, GE Appliances and Lighting, and Tempur-Pedic International. University of Kentucky President Eli Capilouto and University of Louisville President Jim Ramsey also sit on the board.

During its inaugural meeting at the Kentucky History Center in Frankfort, the group heard from the Brookings Institution, a Washington D.C.-based think tank that is helping the group develop a plan to improve a 22-county area’s position as a leader in advanced manufacturing.

Senator scraps Lexington police, firefighter pension bill

State Sen. Tom Buford, R-Nicholasville

By John Cheves —

FRANKFORT — State Sen. Tom Buford, R-Nicholasville, said Tuesday that he has scrapped a controversial plan to sweeten retirement benefits for Lexington police officers and firefighters.

Buford said he won’t call his Senate Bill 136 for a vote this year before the Senate Banking and Insurance Committee, which he chairs. The committee discussed the bill last week but did not vote on it.

Lexington Mayor Jim Gray has agreed to negotiate the issue with police and firefighters, which is a better venue for reaching an agreement than a legislative debate, Buford said.

Gray spokeswoman Susan Straub on Tuesday confirmed ongoing discussions between the mayor and the emergency workers.